After lurking on ficoforums for the past few days I decided to join because I realise forum members can give really good advice and I need help. My basic details are as follows:
Open Loans
Bank - Opened 2018.07 with $9,400 - Monthly Payment $270 - Scheduled Payoff Date 2023.07
Consumer Finance - Opened 2015.05 with $3,400 - Monthly Payment $130 - Scheduled Payoff Date 2022.04
30YR Mortgage (Not Reported on Credit Report) - Opened 2016.6 - Monthly Payment $100
Closed Loans
Bank - Opened 2015.6 with $4,900- Closed 2018.07 (rolled into current open bank loan)
Bank - Opened 2015.11 with $2,900 - Closed 2018.07 (rolled into current open bank loan)
Salary
$1,160
Debt Service Ratio
49%, including 5% minimum payment estimate for CC even though I would pay this card down to 1% of CL before statement date/cycle end (another tip I got from this forum).
Credit Card (Only Card)
Issued by Bank that has my Loan (Pre-approved Invitation) - Opened 2021.06 - Limit $2,000 - Rewards 3% on Gas, Groceries and Utilities; 2% on Pharmacy; 1.25% on Everything Else.
I have no adverse reports, no missed payments, no baddies as far as I can see. My credit bureau (non-US) has a different score range, 250-900, than US bureaus but in most other aspects they operate like US bureaus. The range is divided into 5 tiers with 3 steps per tier i.e. E3 to A1. My score is 648 which is step B1, the score to reach A3 is 665. I think it is fair to say my FICO score would be ~700 and the score estimator on this site gives me a range of 710 - 760. My first self report was 7/2020 and it showed that my score has been the same since 6/2020 and only moved 15 points up to its current level in the previous year.
I am working on a plan to pay off the bank loan by the end of this month. I have $2,500 in a compulsory savings account linked with the loan, I can only access it at the end of the loan term or combining it with additional funds to pay off the loan. I can get the additional funds from a 6%, 1 year loan from my wife's company. If that is successful I will ask my bank to give me a loan to cover the amount remaining on the Consumer Finance Loan as I have learnt on this forum that credit bureaus do not like that type of loan. Long term, is it better to pay off the CFL and take the hit for a new loan account or just leave it be and pay it off on schedule in nine months?
Assuming the bank loan has been paid off by that time, when I pay off the CF loan will there be any advantage to opening a small low interest loan with my bank so that I maintain a mix of revolving and installment accounts?
Also, if the bank loan pay off is successful I will immediately request a CLI on my CC. I will, simultaneously, request a cashback CC with a second bank I have a longstanding relationship with and a traditional line of credit with a third bank I have just started with. The idea with the second CC is solely to reduce my utilisation by increasing my limit across several products and the line of credit is for the same purpose. Additionally, I would use the LOC in absolute emergencies to get cash as it has no cash advance fee whereas CC advance fee is 7.3%. The EAIR is 20%, less than half of the CC.
If all these plans work out I do not plan to make any new credit applications until 9-12 months when I want to do some home improvement and I will take a loan for that purpose from the same agency that holds my mortgage. Similar to my mortgage, this loan would be a home equity loan at very low interest and not appear on my CR. Assuming that I maintain the same adverse free report and can show fully paid off CC statements and limited usage of the LOC, I am reasonably confident that loan will be approved.
I got over ambitious and requested the LOC this week, it was declined because my debt service ratio would have gone to 58%, factoring in the 5% minimum estimated payback for the LOC. The loan officer confirmed that if I pay off the bank loan they would approve the LOC.
In addition to my questions in bold above, are there any tips or suggestions from forum members regarding my plans? Are there any flaws I am not seeing? My ultimate goal is to get my score into the 665 - 800 range (720-800 FICO equivalent).
P.S. Please excuse the overly long post but I needed to give full context.
